What Does Walmart and Uber Breakup Mean for Grocery Delivery?

A partnership between Walmart and Uber (and Lyft in Denver, CO), has been broken according to Reuters reporting. Nandita Bose and Heather Somerville write:

The end of the Walmart partnerships, which has not been previously reported and was confirmed by Walmart and Uber, undercuts a vision the ride-hailing companies laid out: a service that can efficiently deliver anything on-demand, including people and cargo, at the touch of a smartphone app.

“It is incredibly hard to deliver people and packages together,” said a source with a delivery company that works with Walmart and has direct knowledge of the matter. “They are two completely different business models.”

The decision marks an abrupt end to a business relationship that Walmart and Uber announced with much fanfare less than two years ago. At Walmart’s shareholders meeting in June 2016, CEO Doug McMillon touted the company’s investments in technology and spoke about the partnerships in front of a cheering crowd of 14,000 employees. goo.gl/xJdN2e

Soon after, Uber’s grocery delivery service was launched and expanded to four markets. As recently as March, just before Uber ended the arrangement, Walmart said Uber would be a partner in its plans to deliver groceries to more than 40 percent of the country.

“There was clearly some lack of communication there,” said one of the sources with knowledge of the partnerships ending.

Walmart spokeswoman Molly Blakeman confirmed the end of the tie-ups when asked by Reuters, but did not detail the reasons behind the decision. She said Walmart will use other delivery service providers in the four markets where it had previously used Uber.

“Customers shouldn’t notice any difference as the transition takes place,” said Blakeman, who added that the partnership with Lyft never expanded beyond the initial test market of Denver.

Blakeman said the end of the partnerships will not impact Walmart’s plans to scale grocery delivery as they are not tied to any single provider.

Uber put a stop to the grocery partnership when it informed Walmart in March that it would cease delivery operations on June 30, Uber spokeswoman Ellen Cohn told Reuters. The retailer was Uber’s largest partner for its ‘Rush’ service, which delivered groceries as well as clothes, flowers and other goods.